The FTSE 100 index has fallen by at least 7% as markets reopen following the UK's vote to leave the EU.

Sterling fell to a three-decade low after the news, and in early trading shares for banks including RBS saw double-digit falls.

Around £122bn was wiped off the index in the first ten minutes of trading.

Banks bore the brunt of the fall, with Barclays down 27%, Royal Bank of Scotland down 28% and Lloyds taking a 24% dive.

Mark Carney, governor of the Bank of England, said the central bank was ready to provide more than £250bn in liquidity to support financial institutions.

He said "some market and economic volatility can be expected" in the wake of the Brexit vote, adding that the Bank was well prepared.

Mr Carney's statement appeared to calm the market later on Friday morning, with the fall in the FTSE 100 beginning to pull back and sterling creeping back from its earlier freefall.

The chancellor George Osborne said he had discussed the situation with the finance ministers of the other G7 nations.

He said the Treasury and the Bank of England were monitoring the situation closely.

Alex Edwards, head of dealing desk at UKForex, said: "The pound has recovered off of this morning's low. Carney offered some reassurance to a market desperate for it, and cable is back through 1.38.

"The next head to roll is likely to be Osborne, but it's unlikely to give the pound any more impetus - a recovery through 1.40 seems very unlikely at this stage.

"The US reaction will be interesting, and we could still see fresh lows in the pound today."

Earlier on Friday morning, Dennis de Jong, managing director of UFX.com, said: "This is simply unprecedented. The pound has fallen off a cliff and the FTSE is now following suit.

"Britain's EU referendum has been a cloud hanging over the global economy for the past few months and that cloud has got very dark this morning.

"The markets despise uncertainty, yet that is exactly what they're faced with this morning.

"The shockwaves are likely to reverberate for some time and the warning lights are flashing brighter now than ever."

Earlier, the the FTSE-100 index had opened at 6338.10.

After the initial two declarations in Newcastle and Sunderland showed the Leave campaign doing better than previously forecast the pound retreated from its initial post-polls closing position.

As the Leave campaign pushed to win during Friday morning the international money markets began dumping sterling in favour of perceived safer currencies such as the Japanese Yen.

The value of Brent crude also fell below $48 a barrel on Friday morning.

When the pro-Brexit campaign broke the 10 million votes margin the pound fell to as low as £1 to $1.34 US dollars.